Madison Dearborn Partners has tapped Lehman Brothers and Goldman Sachs to lead the financing backing its $1.5 billion merger with movie theater chain Cinemark. The $375 million facility will comprise a $105 million revolver and $270 million term loan. There is no price talk yet, sources said. Syndication is expected to launch at the end of this week or early next week.
Cinemark is also issuing $360 million of senior discount notes due 2014. The proceeds of the bank facility will also be used to repay existing term loans and to redeem the company's 8 1/2% series B senior subordinated notes due 2008. Cinemark's other existing debt will remain outstanding, including its 9% notes due 2013. Cinemark is expected to have around $1 billion in pro forma debt. Debt-to-EBITDA will increase to about 6.3 times on a pro forma basis.
Cinemark is currently owned by Lee Roy Mitchell, the company's chairman and ceo, and The Cypress Group. Lehman and Goldman served as financial advisors to Cinemark, while Allen & Co. advised Madison Dearborn. The merger is expected to close in April. Robert Copple, Cinemark's cfo, and Benjamin Chereskin, a managing director with Madison Dearborn, did not return calls. Lehman bankers did not return calls and Goldman bankers declined comment.